Good afternoon. My name is Marlisha and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter 2008 Management Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question-and-answer session.

Good afternoon and welcome to RFM’s Fourth Quarter and Fiscal Year 2008 Management conference call. In just a few minutes I will introduce David Kirk, President and CEO of RFM who will be the main speaker on our call today. Buddy Barnes, Chief Financial Officer and James Farley, Vice President and Controller are with us today and will join David in answering any questions you may have at the end of our prepared remark. Also with us today is Michael Bernique our Chairman of the Board.

If you don’t have a copy of today’s release, it is available through business wire and one has been posted on our website at www.rfm.com. Click on news on our homepage. In order to improve our communication with investment community, we’re combining a webcast with our discussion today. As indicated on this slide, we would like to remind you that the information provided today by management in the prepared remarks and also in response to your questions are valid as of today October 23, 2008 and may contain forward-looking statements that involve risks. These forward-looking statements are made pursuant to Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. The risks are identified in today’s earnings release as well as in our SEC filings. We encourage you to review these documents.

Now I’d like to introduce David Kirk, President and CEO of RFM.

David Kirk

Thank you Carol and good afternoon.

We have managed our business aggressively so that we will be optimally positioned to return to growth and profitability as the economy recovers. To do this we have reduced costs and redeployed resources to our strongest markets. Our fourth quarter and full year results which we will discuss today were adversely affected by non-cash charges required by Generally Accepted Accounting Principles. We believe there our non-GAAP results better reflect our underlying business trends and the potential for profitable performance from our expanding solutions segment.

Our agenda today will include a discussion of RFM’s underlying strengths, the reasons for the strategic actions we have taken to further strengthen our company, a review of the fundamental improvements we have made, the effect of large non-cash charges on our balance sheet and income statement, a discussion of our financial result this quarter. I will address the change to our guidance policy, a recap of our discussion and then I will open the lines for any questions you may have.

Underlying Strengths. Through both organic development and acquisitions, we have built a very solid portfolio of wireless hardware products which are ideally suited for the machine and the machine marketplace. We have a worldwide diverse customer-base and have a strong expanding sales distribution channels. Our products serve diverse markets including five major markets, two of which appear to be weathering the economic turmoil very well, the medical and industrial markets. We have put into place a lower-cost business model for both manufacturing and support.

Strategic Actions. We have taken certain strategic actions to further strengthen our business. We have successfully recruited two new members to our Board of Directors, Rick Herrman and Jon Ladd. Both men bring strong credentials with them. Rick is part of the Catalyst Group as a financial economics MBA [ph] experience in a broad industry base. Jon as CEO of NovAtel has first-hand experience in a very light business segment. At NovAtel, he successfully went through many of the business cycles that RFM is experiencing now. NovAtel was recently acquired by Hexagonal Suite. We believe this added financial and operating expertise will be very beneficial as we begin fiscal year 2009.

We have continued to broaden our sales distribution channels. We have placed specific emphasis on those channels that best serve our targeted M2M markets. We have developed a marketing plan and an increasing penetration in our established key markets. We have some strong markets and strong customer relationships on which our marketing plan will capitalize. We recently announce the release of two new products. One is a short-range RFIC transceiver, the TRC104 designed for a wide range of applications including security, active RFID, medical telemetry, computer peripherals, and electronics. The second is a new line of industrial-grade 2.4 GHz Wireless Mesh Networking, the XDM2140 RF transceiver module, and the companion XG2400E gateway which integrates Dust Networks SmartMesh-XD embedded wireless sensor network with our modules for a variety of low-power wireless sensor networking applications in the M2M market.

Fundamental Improvements. In our announcement today, we reported positive operating cash flow for the quarter and the year. Our sales for fiscal year 2008 were at near-record level despite the suppressed economy we experienced throughout the second half of our year. We improved our growth profit margin 160 basis points over the previous quarter and 590 basis points from the prior year. This improvement results from various cost reduction initiatives. We believe the non-GAAP net income for the quarter of $122,000 and $1.8 million for the year demonstrates the intrinsic strengths of core M2M hardware business, the rationalization of our systems business, and our ability to optimize our resources. We believe we are positioned for growth and profitability as the economy improves and significant effects of non-cash charges to our balance sheet and income statement.

This quarter we also recognized three major negative contributors to our results. The first was the impairment to “Goodwill and Intangible Assets” resulting from the application of Statement of Financial Accounting Standards No. 142 and 144. The second was the discontinued operations of Aleier software and services business. The third was restructuring costs related to right-sizing our business. I will address each of these individually.

Our policy is to review our intangible assets at least once a year for impairment which was done in our fourth quarter. We utilize an outside expert appraisal firm to help with the required testing. Among the factors considered in the test of impairment for goodwill was our year-end market capitalization in comparison to our network. We also updated our growth projections for individual and tangible assets that were required in the Cirronet acquisition. The slow pace at which these markets are developing and our participation in them has put these projections at risk. While we still believe the Cirronet valued-added modules represent a key addition to our M2M offering and provide excellent future opportunities for us, there is advised forecast resulted in significant impairment when the required test were applied. As a result, we recorded a non-cash charge of approximately $15.7 million in the fourth quarter of 2008. This had a corresponding effect on our balance sheet. The total intangible assets remaining on the balance sheet as of August 31, 2008 are now less than $2.6 million. As a result of these lower balances, the amortization of intangible assets is expected to be almost $1 million lower in our next fiscal year.

The next issue that significantly affected our results in this quarter was our discontinued operations. As we mentioned in our last call, we have been closely monitoring the current market activities and the perceived short and long-term potential for our software and services business. When we determine the opportunities for our software implementation projects continue to push out and the cost of associated work with running this part of our business remained a drain on our financial resources, we took action and discontinue this operation. For Q4, we recorded a net loss for the discontinued Aleier operation of $3.2 million or $0.33 per diluted share. This was $4.7 million or $0.49 per diluted share for the year. A major portion of this was $1.9 million and impairment of intangible assets which had a corresponding effect on our balance sheet. We are in the process of winding down the few remaining contracts that are left and selling the remaining assets. We expect that any effect on the discontinued operations in fiscal year 2009 will be minimal.

The third significant contributor was restructuring charges resulting from the rationalization of our cost structure. We have a lengthy history of managing our business in response to market conditions. We are committed to reducing costs and maximizing our resources during economic downturns. We have eliminated $5 million in annual manufacturing costs by transitioning to a fabless business model, reduced another million in net costs by consolidating our back office operations and more recently we identified additional $2.8 million in savings for the discontinuation of our Aleier subsidiary and other cost-saving measures. As a result of these actions we incurred substantial cost for severance pay and similar cost.

Restructuring expense was $538,000 for the quarter and was $858,000 for the year. Lowering our cost through a series of actions has been the key element in turning our non-GAAP income from continuing in operations positive again. The total financial effect of these three issues was $19.4 million for the quarter and $21.2 million for the year. This is also the major reason our assets declined by $19.5 million from the last quarter. We believe the following slides will demonstrate the significant effect this had on our quarter and what our business model will look like going forward.

Now, we will take a look at our financial results. Unless I indicate otherwise I will be addressing our fourth quarter and fiscal year 2008 results on a continuing operations basis. In spite of the continued pressure from an ever-tightening economy, our fourth quarter sales were $12.4 million and annual sales at $54.7 million we’re at a near-record level. Our gross profit margin was 36.9% for the quarter and 37.6% for the year. This was a significant improvement from the prior compatible quarters and an indication that our cost reduction initiatives are working.

On a GAAP basis our net loss for the quarter was $16.3 million or $1.66 per share and the GAAP net loss for fiscal year 2008 was $16.2 million or $1.68 per share. On a non-GAAP basis we reported net income for the quarter of $122,000 or a $0.01 per share. Non-GAAP net income for the year was $1.8 million or $0.17 per share. The reconciliation of GAAP and non-GAAP is reflected in today’s earnings release and on the following slides.

As you can see along the left side of the chart, we have a summarized income statement. We have combined the various normal operating expenses into one category and combined the non-operating expense with tax expense. The first column with numbers entitled Grand Total reflects all our operations both discontinued and continued. The next column reflects the effect of our discontinued Aleier software and services business. The discontinued operations is netted against our grand total to give us the third column or GAAP operating results from continuing operations. In the fourth column we then show our non-GAAP adjustments which include the intangible asset impairments, restructuring expenses, amortization of acquisition costs, and stock compensation. These non-GAAP adjustments are subtracted from the GAAP numbers to arrive at the fifth or last column which is the non-GAAP performance results. To see the total picture you can look at the last line of the chart which is the net income. You can see we begin with $19.5 million consolidated net loss and we subtract the loss of $3.2 million from discontinued operations to arrive at the GAAP net loss for continuing operations of $16.3 million for the quarter. We then subtract the extraordinary items including the quarter’s impairment charge. We have a non-GAAP profit from continuing operations of $122,000. We expect our business model going forward will look a lot like this column on the far right. In this case we were profitable at a $12.4 million sales level which indicates the extent of the cost reductions we have achieved as a result of our actions.

On the next slide, we have the reconciliation for our full year performance. Looking at the net income line again, we start with a net loss of $21 million, from this we subtract the $4.7 million loss from discontinued Aleier operation to arrive at the $16.2 million of GAAP net loss from continuing operations. When subtracting the extraordinary and non-cash charges we have a net income for the year of $1.8 million. Again, we believe our cost model going forward will look a lot like the column on the far right with significant non-GAAP net income at a $55 million annual sales level. The fact that we will have lower cost model in effect for the whole fiscal year 2009 will allow it to be profitable at a considerably lower annual sales level. We’re going to focus the balance of our presentation on GAAP and non-GAAP income from continuing operations.

Now, we’ll discuss our sales performance in more detail. Since annual sales for 2007 and 2008 were essentially the same with a similar product mix, we will focus our sales discussion on quarterly comparisons. I’ll begin with our wireless solutions group. This includes Cirronet modules, virtual wire, and RFIC products. Sales for this group represented $6 million or 48% of our total quarterly sales. This was up 8% sequentially and down 8% comparatively. The majority of sales of this group of products are into the industrial and medical markets. Both of these markets reflect in growth this quarter and the medical market does not appear to be particularly affected by the tightening economy. Within these group sales of our Cirronet modules was $3.2 million, up 28% sequentially and down 10% from the prior fourth quarter. The sequential growth reflects continuing strength in our primary markets while year-over-year we see a decline due to the completion of a major project.

Virtual wire and RFIC sales were $2.8 million, down 9% sequentially and 5% comparatively for the quarter. While medical applications for these products remain strong, we saw a reduced demand for a consumer tracking application from last quarter. Year-over-year demand for automated meter reading was down somewhat.

Indications of Progress for Wireless Solutions. A bright spot in the current economy is the medical market place. We have seen continued strength from our medical applications. We had a recent design win for a medical implant application for which we are under an NDA [ph] and cannot provide further details. We believe this is a strong long-term customer relationship. Also sales have increased for our medical telemetry application for another major medical provider. Sales remained strong in Europe for GPS applications. We had recent design win for a coach in temperature monitoring system for transportation which uses our Cirronet modules. Subsequent to quarter end, we announced the launch of two new products which expands our wireless sensor networking portfolio products. As we mentioned earlier, the launch of the TRC104 RFIC transceiver, the XDM2140 RF transceiver module, and companion XG2400E gateway are an exciting addition to our product portfolio. We are also continuing to broaden our sales distribution channels and are currently evaluating valued-added resellers for our products. We have also broadened our relationship with Digi-Key. There is a global presence and technical benefits to the designed community and is expected to strengthen our growth. We believe this segment of our business is positioned for growth and profitability.

Next, our wireless components group. This includes low-power components, filters, and frequency control products. Sales for this group were $6.4 million representing 52% of total sales for the quarter. This was down 11% sequentially and 20% comparatively for the quarter. The major markets for these products are automotive, telecom, and consumer which all remains soft. Filter sales were $4.1 million, down 14% sequentially and 19% comparatively. The decreases reflect the negative effect the economy is having on satellite, radio, and telecom applications.

The low power component sales at $1.5 million were flat with the previous quarter and down 36% from the fourth quarter of the prior year. This is a mature product line that appears to be stabilizing at these levels. Our frequency products were $800,000 down 16% sequentially and up 28% comparatively. As we have mentioned previously, these sales represent a relatively small portion of total sales and can very – quite a bit to erratic nature of contract manufactured demands in the next telecom applications they served.

Now, I’ll go through some additional financial details. Our gross profit margin for the quarter from continuing operations was 36.9% and 37.6% for the fiscal year. This was a 160 basis point improvement over the prior years fourth quarter of 35.3% and 590 basis points improvement over our fiscal year 2007 gross profit margin of 31.7%. These improvements are due, of course, to the various cost reduction initiatives we have put into place. Operating expenses for the quarter at $4.7 million decreased net of restructuring and impairment charge expenses, 13% from last year’s fourth quarter and 5% from fiscal year 2007. These reductions are also reflective of our cost reduction initiatives.

Now addressing the balance sheet in comparison to our third quarter. Cash increased slightly to $1.3 million, compared to $1.2 million at the end of the previous quarter. Our account receivables were $8.4 million, a decrease of $1.3 million from the previous quarter due to lower sales and a very linear pattern of shipments in the fourth quarter.

Our DSO remains in the mid 50’s. Inventory at $9.5 million increased $516,000 from the previous quarter due to an increase in finished goods inventory. We expect to work this off during fiscal year 2009.

Goodwill and intangible assets both decreased significantly due to the impairment. Our current liabilities totaled $9.2 million, an increase of $841,000 due to increased payables related to inventory increase and an increased severance accrual. Our long-term liabilities totaled $8.2 million, which was down $844,000 reflecting a pay down of our bank debt.

Now, specifically addressing our liquidity. As I just mentioned, we ended the quarter with a cash balance of $1.3 million. Our availability under our bank credits facility was $1.4 million. We have positive operating cash flow for the quarter of $932,000 and $762,000 for the year. We have amended our bank agreement with Wells Fargo to provide the liquidity and flexibility we need to support our fiscal year 2009 plan. The agreement extends through calendar year 2010.

Guidance. Given the current economic environment and the uncertainties that major industries our products serve are facing, we are suspending our practice of providing guidance. We believe guidance in this climate is extraordinary difficult and can be potentially but not unintentionally misleading and is, therefore, not in the best interest of the company and its shareholders. We will assess reinitiating guidance in the future.

Now to recap. While we report the complicated quarter and year results, we believe the company is now much better positioned to return to growth and profitability. We have put into place an effective low-cost business model, and we are now focused on our core wireless hardware business based on our strategic strengths for the M2M markets. We reported non-GAAP net income for the quarter and the year and improving gross profit margins. We generated positive operating cash flow for the quarter and the year. We have added financial and operating talent with the appointment of two new members to our Board of Directors. We continue to develop and release new products for our targeted M2M market. We feel we are positioned for growth and profitability.

That completes our prepared remarks. Thank you very much for your time today. We will now take questions.

Carol Bivings

Operator, we’ll now take questions.

Question-and-Answer Session

Operator

(Operator instructions) We’ll pause a moment to compile the Q&A roster. Your first question comes from John Vein [ph]. Your line is now open.

Rego Managuchi

Yes, hi. This is Rego Managuchi [ph] for John Vein.

David Kirk

Yes, how are you?

Rego Managuchi

Very good, how are you doing?

David Kirk

Good, thanks.

Rego Managuchi

Just a couple of questions. Can you talk a little bit more –?

David Kirk

That cut out, we didn’t hear you. Hello? Can you repeat that? We lost him.

Carol Bivings

Operator?

Operator

Yes, Ma’am?

Carol Bivings

We seem to have lost that call. We did not hear the question.

Operator

I’m sorry. He was released back into the main conference.

David Kirk

Can you put him back on please?

Operator

(Operator instructions) Your next question comes from John Vein.

Carol Bivings

Thank you.

Rego Managuchi

Yes, hi. This is Rego Managuchi again. Can you talk a little bit about the order trends in the Cirronet business?

David Kirk

Can you repeat that again? You said the order trends in the automotive business, in particular?

Rego Managuchi

Yes.

David Kirk

Yes. The automotive business is typically about 25% of our business, and we have seen some fairly significant softness there. Production is down approximately 30% and it affects the component side of our business, satellite radio filter as being the major part of the filter business and then in the low-power components is the keyless entry and tire pressure monitoring; so those are the automotive applications. It is quite a bit of softness that we’re seeing, but satellite radio installs are on the increase; and so we know we’re seeing not that full decrease in that business there. It affected the filters, probably the most significant in this recent quarter.

Rego Managuchi

Okay, thank you. And moving to the restructuring cost savings. Can you give us some color on how should we look at it going forward?

David Kirk

Yes, I think that the last column there that we showed in the charts, those are probably the most significant charts, I think, to try and give you a flavor of that. And so for the actual fourth quarter, you saw that a $12.4 million number, 37% gross profit margin and a non-GAAP income; not all of the cost reductions were really effective at that particular time as we had done several steps in that through the year, obviously, as you’ve seen. So going forward, we believe that it will be something like that but maybe even a little bit lower for that last revenue, we will actually have non-GAAP profit. Okay?

Rego Managuchi

Okay, thank you and one last question. The inventory levels, you said you’re looking at reducing it getting into the next quarter?

David Kirk

That’s correct, yes. The inventory grew somewhat in the quarter there and that’s because, obviously, we changed. The business model, we went to fables. And so, we are buying more finished goods. And so, with the somewhat softening of the business, we still had some inventories coming in but we believe that we’ll be working that off very shortly.

Rego Managuchi

Okay, thank you.

David Kirk

Thank you.

Operator

Thank you so much. Your next question comes from Chris Souza [ph]. Your line is now open.

Chris Souza

Hey, guys.

David Kirk

Hey, Chris.

Chris Souza

A few questions. How far in advance do you know what your revenues are going to be for the quarter? Most of the orders come in four weeks in advance or eight weeks in advance, or how far in advance do they come in?

David Kirk

It’s really a mix group. The automotive is probably somewhere in the order of, say, eight to ten week, although we are seeing a little bit of instability there, all the way to some of the Asian-type customers. Maybe, as you notice, some are two to three to four weeks, so it really is a mixed bag across the different segments.

Chris Souza

Okay, and did – today is October 23, your quarter ends in 35 days, whatever it is. So obviously, this is the latest that you report because it’s the fourth quarter, so you guys don’t have visibility into what your, at least, what your top line is going to be for the first quarter?

David Kirk

That’s correct, yes. There is that much limited information in the marketplace of visibility found in the customers. We’re obviously still working very, very hard to actually secure as many orders as we actually can, but it’s just very uncertain out there. So the focus really for us, at this peak or time – obviously, we’re very pleased with the cash flow that we had in the fourth quarter and for the full year, so controlling our cost and focusing on cash flow early in fiscal year ’09 is going to be very, very important for us.

Chris Souza

How many quarters do you guys expect to continue to see both cash and non-cash restructuring charges going forward?

Jim Farley

This is Jim. Well, I doubt – I don’t think we’re going to have a great deal of restructuring P&L costs. Now, what happens is you have a severance. Suddenly, the people have different depending on their levels of service. We’d pay them off over some time, so the cash influence goes – the accrual just gets worked down through, at least, the first half of next year. The P&L, it should be much reduced. We don’t have – we’ve restructured, we have the business model where we’d like it so we don’t, at least at this time, anticipate a big fiscal year ’09 number.

Chris Souza

You announced recently that you have two new board members who joined your board. Would they be replacing two board members? And if so, what two board members are stepping down?

David Kirk

Yes, right now, we have – we are really very pleased. The nomination committee got Spencer Stuart. We went out, did a routine search, and found Rick Herrman and Jon Ladd; very, very good experienced people. What will happen is that the next board meeting we have through our normal process, we will actually have a nominating committee in conjunction with that meeting and determine who will actually be on the roster for the next annual shareholders meeting which will be in January, so that will actually come effective and be announced after that next board meeting

Chris Souza

I’ll just ask one last question, I’ll step back in the queue. Now that you, guys, are refocusing your efforts on the components side of the business, can we expect research and development expenses to go down significantly now?

David Kirk

I wouldn’t say that we are refocusing on the components side of the business. It’s a combination of the components and the wireless solutions side of the business. I have believe, Jim, you had the R&D numbers there?

Jim Farley

Well, we’re down R&D this year. We’ve had a series of things where we had groups of engineers here in Duluth then we consolidated that, so we’re down about $1 million year–to-year. There is some more reduction coming to us, but I wouldn’t think would be nearly as dramatic. We’re about to the structure we’d like to be, and that still is a lot of R&D costs in our solutions business which is where our growth opportunity, our biggest growth opportunities seems to be.

Chris Souza

Okay, I’ll step back in the queue. Thank you.

David Kirk

Thank you.

Operator

Thank you so much. Your next question comes from Tom Szulist.

Tom Szulist

Yes, this is Tom Szulist. I have a question about the automotive side of the Sirius and the XM merger going through. Are you seeing any synergies now between the combination of the two companies and do you expect that that will start to come into play going forward? Could you give us a little update there?

David Kirk

Well, we are actually seeing some of the things happen as far as the two companies starting to combine, and we’ve seen some activity there. We’ve done a very good job actually with both engineering groups going to have filtered designed in into the next several generations. We haven’t seen a whole lot of new specific filter requirements coming out of them for a combined product, that type of thing; but we do see some good opportunities. The business has certainly not stopped on the satellite radio filters. It’s actually doing very well. It’s just down somewhat because of the automotive schedule but no major changes, I don’t think, Tom. It seems to be moving ahead nicely and our engineering groups are still working with both engineering areas.

Tom Szulist

Thanks . It seems like you’ve streamlined and pretty well taken most of the cost study restructure now. Are you feeling that there are any other areas that you still have much restructuring to do in or are you pretty now ready to focus on the growth and profitability?

David Kirk

Yes, I think we’re about as lean as we can be. We’ve taken – we’ve made two acquisitions. Headcount’s down into the 150 and 120 range. We’ve done some very good things. We’ve got a very low-cost model for profitability and even lower as far as positive cash flow, so you’re exactly correct. We’re going to focus on that hardware portion of the business, something that we know very well and can handle, and we do see some very good things there; so yes, I believe that we’ll be very focused on that profitability and cash flow.

Tom Szulist

And your relationship with Wells Fargo, I know you had your lines of credit or your relationship with them. Was that very costly to get that relationship or those covenants changed?

David Kirk

You know what? I don’t believe it was. I mean, we, in fact, did all this to make some modifications there but the real key for them was obviously the positive cash flow, and so almost $1 million of positive cash flow in that fourth quarter made those discussions obviously a whole lot smoother and a whole lot easier; so they know that we’re focused on the right thing at the right time.

Yes. Can you tell me how the new directors will positively impact the company?

David Kirk

Yes, the two board members actually bring some different things to us. Rick Herrman actually is out of the Houston area, a group called the Catalyst Group; and he, in fact, has a tremendous amount of just financial business expertise, emanating just a lot of different things in a lot of varieties of industries. Jon Ladd is actually the President/CEO of NovAtel, which is a GPS/GNSS supplier; and he’s got some very good experience with them as far as the various business cycles that they have been to. They, in fact, were small, struggling; he got it back, streamlined it, got them flowing very nice and profitably. NovAtel was actually recently acquired by Hexagon, so I think it’s a combination of those financial expertise and then also people that have actually very recently lived the experience that we are actually going through right now. So we do, in fact, have already seen a tremendous help from the two of them.

Marvin Glover

Thank you.

David Kirk

Thank you.

Operator

Thank you. There are no further questions at this time.

David Kirk

If you could maybe just check one more time please, Operator

Operator

(Operator instructions) You have a follow-up question from Chris Souza. Your line is now open.

Chris Souza

Hi, this is actually David. Chris had to step out.

David Kirk

Okay. Hi, David.

Chris Souza

Hey. I was – just some follow-up questions from your last call. Your – back to the inventory situation. You said that on the last call, the last quarter, your inventory, as you were expecting, they reduced inventories to help with your cash flow; and then it’s back up again this quarter sequentially. Like Chris said earlier, there are only 35 or 37 days left in the quarter. I mean, have you reduced inventories this point? At this point in the quarter, are your inventories coming down?

Jim Farley

Yes, Chris, this is Jim. Yes, it’s down some now. There’s a bit of a time lag involved. I mean, we anticipate what the production load is. We load our contract manufacturers with a schedule, and then the orders either come in or up. They’re higher or lower, so there tends to be a delay. We offer them pretty solid eight-week visibility, a little less on the 90 days, so our schedule is somewhat locked in. So we end up – if we don’t hit quite the anticipated sales, you’ll have a little bump in inventory and what you do is the next quarter, you turn them down; and we’ve turned our contract manufacturers down pretty significantly in this quarter. So we do believe we can get at least a great deal of that out of the balance.

Chris Souza

Okay. Well, thanks for that insight. Really just one other question. Last quarter as well, you had a really strong showing, I guess, in the telecom market. I believe – I don’t have your release in front of me but I believe that dropped from 18% of sales to 13% of sales. Was that like a one-time win last quarter or is that market gotten a lot softer?

David Kirk

No, it wasn’t a one-time win. We actually continued to shift fairly steady. The significant piece of business is actually some Chinese telecom business that we’ve actually captured, so I think it was just general softening there; but no, that business is actually still continuing on. In our filter business, a decrease, I think about is $700,000; but most of that decrease is actually due really to the satellite radios softening and the automotives. So telecom filters are still doing pretty well.

Chris Souza

So that’s – and you mentioned China. That base station application in the Chinese telecom market, that’s – you said that’s still ongoing?

David Kirk

Yes, still ongoing and doing quite well. Yes.

Chris Souza

Okay. I think that was all our questions.

David Kirk

Okay, very good.

Chris Souza

Appreciate your time.

David Kirk

Thanks.

Operator

Thank you so much. You now have a follow-up question from Marvin Glover. Your line is now open.

Marvin Glover

Yes. Your cash flow is positive and on any measure of sales to price, your stock is very cheap. It’s incredibly cheap. I never thought it would be at these levels. Do you talk about it and are there anything – actions that you can take that can help out the stockholders?

David Kirk

Well, we certainly talk about it and like yourself, I think we just really can’t believe that it’s there – obviously, $50 plus million in revenue, a dramatic improvement in our gross profit margins, and as we showed there, a non-GAAP profit for the year of about $1.8 million. That’s about a $2.4 million improvement. With the economic market the way it is, there isn’t a whole lot of investor conferences. There’s not a whole lot that we can actually do to just rush out and do those types of shows. For us, I think it’s really a key that we just continue to show that positive cash flow that we’ve been talking about, and I believe that that will actually be very, very significant for the investors. So one to two quarters of showing those types of positive results, million dollar quarters of cash flow, I think that will be the type of thing that will really get the investors more on this thing. There seem to be quite a bit of pressure as far as, “Did we have the liquidity, and so on and so forth?” So positive cash flow in the fourth quarter really, should put a stop to a lot of that.

Marvin Glover

That’s very impressive. Do you worry about hospital takeovers or anything like that?

David Kirk

Yes, probably on a fairly regular basis because, as we’re trying to actually explain to you the underlying strengths, if in fact somebody sees those underlying strengths and sees that positive cash flow, that’s certainly a possibility; so we’ll do what we can. If the right opportunity comes along and it’s the best thing for the shareholders, we’ll certainly look at it, but I think you’re right. It’s a balancing act of showing the underlying strengths, the performance, that positive cash flow out of this size of business, and you’ve got a market capital of about $4 million or $5 million. That’s something certainly to worry about.

Marvin Glover

Well, good luck for both of us.

David Kirk

All right, we’ll keep after it.

Operator

Thank you. There are no further questions at this time.

Carol Bivings

Thank you, Operator. Before we end our call, I’d like to remind everyone that we will be conducting our first quarter fiscal year 2009 management conference call on December 18, 2008.

That concludes our call. Thank you for your interest in RF Monolithics.

Operator

This concludes today’s conference. You may now disconnect.

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